The multi-role HMNZS Canterbury's two landing craft are be replaced due to design flaws.
The problems are the latest to affect the fleet of seven ships bought by the Government for $500 million. The Australian-based builders BAE Systems have agreed to an $85 million payout.
The navy today confirmed some of that money would go towards designing and building two new landing craft medium (LCMs) to replace the vessels which came with Canterbury when she was commissioned in Melbourne in June, 2007.
Other cash would be used fixing weight issues on the two new 85 metre offshore patrol vessels, HMNZS Otago and HMNZS Wellington.
The deputy chief of navy, Commodore Bruce Pepperell, told NZPA design deficiencies in Canterbury's landing craft had caused problems with the bow ramp doors which were prone to cracking.
They were also problems loading cargo into the landing craft from the stern door of Canterbury at sea, and stability issues.
The craft were still being used, but with "very severe limitations".
The LCMs were designed to take troops and cargo ashore, particularly on aid missions to Pacific islands, where there were no suitable port facilities. Cargo would be unloaded on to a beach through their bow door ramps.
However, when the faults were discovered the navy significantly reduced their use.
"We can't use the bow doors. We don't do ramp to ramp marriages (at sea)"
"They are cracking, they need to be stronger," he said.
Soon after Canterbury arrived in New Zealand the Labour Government ordered an independent review into several issues. The inquiry by John Coles, formerly of the Ministry of Defence in England, found the problems would cost at least $20m to fix.
That figure had been overtaken and much of the $85m fee negotiated with BAE Systems would be spent on Canterbury, including two new landing craft, Cdre Pepperell said.
He said the navy had yet to decide what would happen with the existing landing craft.
He could not say how much the new landing craft would cost.
The landing craft were hoisted aboard on either side of the ship and Cdre Pepperell said the new craft would be about the same size and weight so changes would not be needed to the cranes on the ship.
Other issues which needed fixing on Canterbury included modifications to improve its sea-keeping abilities such as ballasting and changes to the fuel transfer system which would allow fuel to be transferred from bunker to bunker depending on sea conditions.
The review found Canterbury was an intrinsically safe ship but needed the remedial work to enable it to perform to the navy's expectations.
Some of the $85m settlement would also be spent on the two offshore patrol vessels after they were found to be slightly too heavy, meaning they would sit slightly lower in the water. That would affect the ice belt on the ship designed to protect it from sea ice in the Southern Ocean.
